\u3000\u3 China Vanke Co.Ltd(000002) 714 Muyuan Foods Co.Ltd(002714) )
Event: the company released the annual report of 2021 and the first quarterly report of 22 years. In 2021, the operating revenue reached 78.89 billion yuan, a year-on-year increase of 40.17%; The net profit attributable to the parent company was 6.904 billion yuan, a year-on-year decrease of 74.85%. The operating revenue in the first quarter of 22 years was 18.278 billion yuan, a year-on-year decrease of 9.29%, and the net profit loss was 5.18 billion yuan, a year-on-year decrease of 174.4%.
Key investment points:
Breeding continued to expand, and the cost advantage supported the annual profit. In terms of quantity: the slaughter of live pigs has increased significantly. The sales volume of Q1 pigs in the whole year of 21 and 22 were 40.263 million and 13.817 million respectively, with a year-on-year increase of 122% and 79% respectively. Price: the average selling price of the company’s commercial pigs in 21 years was 16.9 yuan / kg, down 44.87% year-on-year. The performance of the company is under pressure due to the decline of pig price. However, the cost advantage supports the company’s profitability throughout the year. The net profit in 21 years was 6.904 billion yuan, a year-on-year decrease of 74.85%. In the 21st year, the cost of animal husbandry was reduced to 15 yuan / kg, leading the industry. The market of live pigs in Q1 in the year of 22 was in a downturn. We expect the company to lose an average of 400450 yuan in the quarter, which will affect the overall performance.
Sufficient production capacity and high quality, and the extension of slaughtering is accelerated. Sufficient production capacity: the company has sufficient production capacity reserves. At the end of 21, the production capacity has exceeded 70 million, with a year-on-year increase of 40%, and the pig stock is 36 million, an increase of 64% compared with the end of November 20. In terms of sows, 22q1 can breed 2.752 million sows, down 2.8% from the end of 21. Some inefficient sows are eliminated. At present, the psy is about 24, which has a significant advantage over the average level of 17-20 in the industry. Slaughtering promotion: the company accelerated the extension to the downstream slaughtering meat industry chain and vigorously expanded the national fresh pork sales network. At the end of 2021, 22 slaughtering subsidiaries were established, of which 6 were put into operation, slaughtering 2.899 million pigs and selling 292200 tons. The revenue of slaughtering meat business reached 5.42 billion yuan, accounting for 6.87%, an increase of 5.77 PCTs year-on-year. As of March 22, the company had a total slaughtering capacity of 22 million, an increase of 37.5% over 16 million at the end of 21, and the capacity utilization rate was about 70%. It is estimated that the total slaughtering capacity will exceed 37 million by the end of 22 years, and the slaughtering meat business will continue to promote.
The cost is expected to continue to decline, and the cycle will pick up the east wind. Cost: the company has reduced costs and increased efficiency in all links of the industrial chain, and has set a cost target of 13 yuan / kg in 22 years, which is 2 yuan / kg lower than that in 21 years, and its core competitiveness has been continuously consolidated. Launch: 50-56 million units are expected to be launched in 22 years, with a year-on-year increase of about 10-15 million units. The market share is expected to be further improved. In terms of the cycle, we believe that the worst time point of the industry has passed, and the recovery of the pig cycle will drive the improvement of breeding performance. According to Yongyi consulting, at present, the pig price has increased by 28.14% compared with the lowest point in March. The company is expected to realize the simultaneous rise of volume and price in the upstream channel of the industry and grasp the cycle opportunity.
Investment advice
The company is a leading pig enterprise integrating feed, breeding, feeding, slaughtering and other businesses. In the future, it will benefit from the upward cycle by virtue of its production capacity and cost advantages. We expect the net profit attributable to the parent company from 2022 to 2024 to be 8.582 billion yuan, 38.170 billion yuan and 39.038 billion yuan respectively. EPS is 1.61 yuan, 7.17 yuan and 7.34 yuan respectively, and the corresponding PE is 32, 7 and 7 times respectively, giving a “buy” rating.
Risk tips: the cost control is not as expected, the periodic fluctuation of pig price, the fluctuation of epidemic situation and other risks.
